DAILY UPDATE 04/03/2014

Transcription

1 Key Economic Data Results 04/03:- DAILY UPDATE 04/03/2014 Date Time Event Survey Actual Prior Revised 03/04/ :30 AU RBA Cash Rate Target 2.50% 2.50% 2.50% -- 03/04/ :30 UK PMI Construction /04/ :00 EC PPI MoM -0.10% -0.30% 0.20% -- 03/04/ :00 EC PPI YoY -1.30% -1.40% -0.80% -- 03/04/ :45 US ISM New York /04/ :00 US IBD/TIPP Economic Optimism Asian Markets The Day that was:- Asian stocks ended mostly higher on Tuesday after Russian President Vladimir Putin ordered tens of thousands of Russian troops involved in a military exercise near Ukraine's border to return to their bases in an announcement that helped ease fears that the Russian aggression could derail the global economic recovery. "The supreme commander of the armed forces of the Russian Federation gave the order to the troops and units taking part in the military exercises to return to their permanent bases," Kremlin spokesman Dmitry Peskov was quoted as saying by Russian news agencies. Japanese shares reversed early losses to end higher, snapping a four-day losing streak. The Nikkei average rose half a percent to finish at 14,721, led by exporters as the yen weakened against all of its sixteen major peers, buoyed by a slew of positive US economic reports and the news of Putin withdrawing troops engaged in exercises outside Ukraine. China's Shanghai Composite index slipped 0.2% to 2,071, ending a fourday winning streak after the People's Bank of China expanded the scope of its efforts to drain 85 billion Yuan from the banking system through forward bond repurchase agreements. The action by the central bank came ahead of the annual meeting of China's legislature, which begins Wednesday. Hong Kong's Hang Seng index gained 0.7% to finish at 22,658. Australian shares rose modestly, with sentiment underpinned by encouraging current account and housing data. The benchmark S&P/ASX 200 gained 0.3% to finish at 5,400. In economic releases, the total number of building approvals issued in Australia jumped a seasonally adjusted 6.8% in January from the previous month, beating forecasts, while the country's seasonally adjusted current account deficit stood at A$ billion in the fourth quarter of 2013, largely in line with forecasts.

2 XAUUSD: -1.20% High: Low: Close: Daily Support 1: 1330 Daily Support 2: 1320 Daily Resistance 1: 1360 Daily Resistance 2: 1400 Gold fell more than 1% on Tuesday as tensions eased in Ukraine. Traders booked profits as it was reported that Russian President Vladimir Putin said Russia would only use military force in Ukraine as a last resort and recalled Russian troops back to their base from military exercises on the border with Ukraine. The attempt by Vladimir Putin to ease tensions was welcomed by the market with equities rallying strongly on the release of news the S&P setting a new record high intraday. While gold came under considerable pressure on the release of these reports, falling $13 from $1350 to $1337, the loss was minimised by the realisation that the conflict could be on going and military action may well be undertaken by the Russian state. As a result, gold continues to be well supported in the mid-$1300 region for the time being. Gold traded around the $1350 level prior to reports that Russian President Vladimir Putin had recalled troops to their base from the border with Ukraine. Falling initially to support at $1337 and bouncing, the easing tensions resulted in gold moving below the 61.8% Fibonacci retracement level. The precious metal appears to be well supported in this region by continuing tensions in Ukraine, despite easing slightly today, and with weaker than expected US data. With all eyes on Ukraine, the monthly jobs report has been overlooked this Friday and that may help drive gold through to support at $1320 or immediate resistance at $1360. The RSI has eased slightly below the overbought level at 70 this is the third consecutive time that breaching this level has been met with profit taking this was slightly skewed today by the reports out of Ukraine, however.

3 AUDUSD: +0.13% High: Low: Close: Daily Support 1: Daily Support 2: Daily Resistance 1: Daily Resistance 2: The Aussie closed higher against the dollar on Tuesday, having initially come under pressure after the Reserve Bank of Australia said the exchange rate remains high following a decision to keep borrowing costs at a record low today. RBA Governor Glenn Stevens said that while the currency s decline to date has helped the economy, it remains high by historical standards. The comments caught some traders off guard after the RBA had weakened their stance to an extent over a lower Aussie. The RBA at its last meeting confirmed that the 2.50% interest rate was enough to foster growth and inflation and it would remain at this level for 2014 in all likelihood. This lifted the Aussie and removed the negative bias that had clouded it for months. The comments today, however, point to the RBA still looking to a weaker currency in the longer term. AUDUSD has been range bound since Thursday, trading between and these are our immediate support and resistance lines. While should provide significant support for the pair with the 50-day moving average lying just under the 23.6% Fibonacci retracement level of the October 2013 to January 2014 decline, appears to be intermediate resistance at present on its way to stronger resistance at which held strong on numerous occasions mid-february.

4 USDJPY: +0.75% High: Low: Close: Daily Support 1: Daily Support 2: Daily Resistance 1: Daily Resistance 2: The Yen gave up recent gains as traders sold off the safe haven currency in favour of riskier assets as tensions eased in Ukraine. The Yen s biggest fall in seven weeks against the dollar came as Russian President Vladimir Putin said there was no immediate need to send troops to Ukraine and would only do so in an extreme case. These comments suggest that the Ukraine crisis, the worst between Russia and the West since the Cold War ended, won t immediately escalate, resulting in the markets taking a risk on mentality after yesterday s rush into safe haven assets such as gold and the Yen. Resistance turns support at Y as the 38.2% Fibonacci retracement level looks to protect profits after today s strong rise. Gains may well be capped at the Y region as the 100 and 50-day moving averages lie in close proximity.

5 KEY Data: 05 th March 2014:- Date Time Event Survey Prior 03/05/ :30 AU GDP SA QoQ 0.70% 0.60% 03/05/ :30 AU GDP YoY 2.50% 2.30% 03/05/ :45 CH HSBC/Markit Services PMI /05/ :55 GE PMI Services /05/ :00 EC PMI Services /05/ :00 EC PMI Composite /05/ :30 UK PMI Services /05/ :00 EC Retail Sales MoM 0.80% -1.60% 03/05/ :00 EC Retail Sales YoY -0.20% -1.00% 03/05/ :00 EC GDP SA QoQ 0.30% 0.30% 03/05/ :00 EC GDP SA YoY 0.50% 0.50% 03/05/ :00 US MBA Mortgage Applications % 03/05/ :15 US ADP Employment Change 155K 175K 03/05/ :00 CA Bank of Canada Rate Decision 1.00% 1.00% 03/05/ :00 US ISM Non-Manf. Composite /05/ :30 US DOE US Crude Oil Inventories 1300K 68K 03/05/ :00 US US Federal Reserve Releases Beige Book With no major US data out today to impact the dollar, we have the ADP employment number out tomorrow which is the usual precursor to non farms payroll on Friday. Private employment is expected to have decreased by 20,000 from last month which may be an indication that the adverse weather continues to impact the labour market. GDP figures out of Australia and the Eurozone should also capture the attention of traders. The Reserve Bank of Australia have stated that the current 2.50% interest rate is enough to foster economic growth this has supported the Aussie recently and it will be interesting to view whether the forecasts are correct in predicting an upturn. Eurozone GDP will provide another gauge as we head into the ECB decision on monetary policy on Thursday. The crisis in Ukraine has dragged the euro back down to levels prior to last Friday s surprising inflation reading, a strong GDP number and is the level to look out for as it continues to limit the euro s gains against the dollar. For more information on Economic Releases, please see the below link:

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